The Dip Was Bought Again In SPX, Can Bulls Run It This Time? August 9th Plan
Yesterday, ES put in a technically perfect 48 point rally. Why did we start the week with a squeeze? Because on Friday, ES back-tested the single most important level in this market currently: The 4493 area that we broke out from on July 12th, which caused two weeks of relentless dip buying after. As I always say though markets don’t make things easy - they move with conviction one way, get players overcommitted on one side, trap them, mean revert, then do it over again.
This is why I concluded yesterdays newsletter by writing the following: “We just had a clean move I think things likely get tactical tomorrow - it will reward level to level day traders only with no bias. Expect bi-directional action”…adding “After today’s rally, I think tricky, tactical, back and forth action is likely tomorrow - be prepared to trade level to level with no bias”. This describes today’s action perfectly, and we sold off from yesterdays highs, down to 4480s, chopped relentlessly for hours, then squeezed hard in the afternoon.
Where did this afternoons squeeze start from? Yet again, the 4487-93 zone. Will this rally finally stick? In today’s newsletter, I’ll talk this, I’ll then break down the setup that triggered these recent rallies to begin with (one of my favorites), then provide the actionable trade plan for tomorrows session.